CNBC Has Seriously Underestimated the Sears Turnaround Story

April 30, 2016
Why many retirees will run out of money

For example, 9 percent thought it would be all right to withdraw 15 to 24 percent of their savings annually. Even with positive investment performance, that would almost certainly deplete a nest egg within a decade.

9 percent of these investors may have complete and utter faith in the Sears turnaround story.

Oh, sure. SHLD closed down 9% on Friday, is down 20% for the year, and is down 89% from its peak in 2007 (adjusted for dividends and splits). That's good news though! Why?

Return to the mean, baby. Return to the mean.

You'd feel downright silly only withdrawing 4% of your savings each year knowing that your heavily leveraged and undiversified Sears portfolio would shortly be returning to the mean! Sure thing! Can't lose!

Bad Mark. Bad. Bad. ;)